Date: 09/18/2000 10:04 AM
Subject: Opposition to proposed rule for CPA firm services
To whom it may concern:
The rule that the Securities Exchange Commission (SEC) is proposing, limiting
the services a CPA can perform for their clients, is an issue that the I believe
will negatively affect every CPA, and potentially every business in
Massachusetts.
The proposal would prohibit firms that audit SEC registrants from providing
non-audit services to their audit clients.
This will negatively impact all CPAs and their clients regardless of size.
We urge you to eliminate or substantially modify this proposal!
This is not an issue that will just affect the largest CPA firms, often referred
to as the Big 5. Your proposal will affect sole practitioners and medium sizeed
firms as well.
If you adopt this rule, we fully expect that other regulators such as state
boards of accountancy, U.S. Department of Labor for ERISA audits, and federal
and state bank regulators would adopt similar rules to "harmonize" their rules
with the SEC rules. This cascading effect would affect firms of all sizes, as
well as services provided to hundreds of thousands of entities. This proposal
could negatively impact the following services that CPAs firms like ours
provide: accounting, book-keeping and payroll services, systems design and
implementation, valuation, management consulting, financial planning, expert
witness and other services that are the growing areas of many firms. In short,
we believe the SEC's proposed rule would become the de facto standard in a short
period of time and that the breadth of services accounting firms may offer would
be limited to one: audit or non-audit services.
This proposal even affects CPAs in Industry.
If a company relies on multiple services from a CPA firm, businesses will be
negatively impacted. The implementation of this rule will adversely affect the
relationships between CPAs and their clients. What is most alarming is that the
your proposal ignores the reality that stockholders and corporate executives are
confident in their auditor's independence and are satisfied with the overall
quality of financial reporting.
I urge you to ACT NOW to eliminate or dramatically change this proposal.
We all take our profession's independence standards and the responsibility to
represent the public interest seriously. It is an attribute and responsibility
that defines us as a profession. Since there is nothing to demonstrate any
significant problem in this regard, we struggle to figure out the motivation
behind pursuing this dramatic change.
Thank you for your time. We hope you will take the time to understand our
position and support our opposition to this proposal.
Sincerely,
Leslie P. Vitale, CPA, MST
Vice President
Vitale, Caturano and Company, PC
Certified Public Accountants and Business Advisors
210 Commercial Street
Boston, MA 02109